Angola penalises Galp’s results: profit decreases by 24% in 2016

Galp's 2016 profit was harmed by impairments in Angola. The results presented by the oil company had a 24% decrease, surpassing the market's expectations, nonetheless.

In 2016, Galp had a 483 million euros’ profit — 24% less than the results from the previous year, which mainly reflects the Angolan impairments.

Explaining the evolution of the 2016 results in a press release sent to the CMVM (Portuguese Securities Market Commission), Galp highlights the 20 million euros’s sanctioning from the inventory effect and the “non-recurring items”, which had a negative impact of 324 million euros, “including the asset impairments in Angola, as well as in relation to the transfer of contracts for the construction of the replicant FPSO hulls”.

Overall, Galp’s sales volume went up to 13.12 billion euros in 2016, representing a 15% decrease when compared to the previous year. The Refining & Distribution area continues to represent the company’s main activity, with a 10.52 billion euros profit in that segment. The Gas & Power business had sales worth 2.44 billion euros (25% less than in 2015). As for Exploration & Production, there was an increase of 38% in the business, to 852 million euros.

Galp also highlights the net debt had a 335 million euros’ decrease to 1,870 million euros by December 31, 2016. Considering the loan to Sinopec, debt was only 1,260 million euros, representing the oil company’s Ebtida — a financial strength aspect analysts consider to be very positive and that opens doors to acquisitions in Brazil throughout this year.